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COMMUNICATIONS POLICY REFORM
New CRS Report on Telecom Reform Legislation
Media Ownership Proceeding Soon, Say Industry Sources

MEDIA
A New Media Order
Fair? Balanced? A Study Finds It Does Not Matter
Captioners Busy as Broadcasters Cope with New FCC Rules
Ready To Learn Grants Announced
Radio Free America
VOD Software To Include Nielsen Codes

TELECOM
State Action on Telecom Mega-Mergers
Sprint Braces for Affiliate Fight
Industry Calls For Slower E911 Sked
Contracts Lock Phone Users in Cell Block

QUICKLY -- E/I Bug Deadline Set for Sept. 19; New N.Y. law targets hidden
Net tolls; California Considers Tax Breaks for Filming

COMMUNICATIONS POLICY REFORM

NEW CRS REPORT ON TELECOM REFORM LEGISLATION
A new report from the Congressional Research Service analyzed options for
telecom reform in Congress and at the FCC, assessing levels of support and
dissent among industry players and political constituencies. The report
cited 2 main public policy issues: 1) Devising the best regulatory
framework for encouraging investment and innovation in the broadband
network and applications riding over the network. 2) Deciding whether the
government should intervene in rural markets by expanding universal service
to include access to broadband networks at affordable rates. Despite
widespread consensus that today's statutory and regulatory framework for
telecom is ill-suited for the market, there's disagreement about how to fix
it, the report said. A key barrier is deciding if an information service is
purely an information service or has a telecom component invoking more
rigorous regulation. The report also identified two challenges to Congress
in tackling a telecom law update: 1) Creating a regulatory framework that
market changes won't render obsolete and 2) Identifying regulatory elements
suitable for handling at the state and local level versus those that should
be centralized, the report said. To enhance broadband competition, the
report said, intramodal competition will continue to be important,
especially for large business markets. On DTV transition, the report said
Congress should leave multicasting to the FCC to "study and construct
recommendations for rules (and, if necessary, statutory changes) to address
the potentially related issues of mandatory carriage of multiple broadcast
signals and better serving the needs and interest of viewers in different
governmental jurisdictions." This is likely to give momentum to political
forces seeking to address the multicasting issue as a "study item" in DTV
legislation.
[SOURCE: Communications Daily, AUTHOR: Anne Veigle]
(Not available online)

MEDIA OWNERSHIP PROCEEDING SOON, SAY INDUSTRY SOURCES
Industry sources are telling Communications Daily that FCC Chairman Kevin
Martin will issue a notice of proposed rule making on media ownership rules
within the next 30-60 days. The aim is to have new rules in place by Spring.
[SOURCE: Communications Daily, AUTHOR: Tania Panczyk-Collins]
(Not available online)

MEDIA

A NEW MEDIA ORDER
The 2005 edition of investment banker Veronis Suhler Stevenson's annual
Communications Industry Forecast was released earlier this week and it
concludes that the industry has effectively reached a "new order" that
shifts power to consumers from advertisers, and to new media from
traditional media. The report estimates that new media accounted for 16.7
percent of all advertising spending last year--up from only 10.3 percent in
the report's baseline year, 1999. Ad spending in the new media -- which VSS
defines as cable and satellite television, satellite radio,
business-to-business e-media, consumer Internet, movie screens, and video
games -- is growing at double-digit rates, while traditional media are
rising only at single-digits. As a result, VSS projects that new media will
account for 26.3 percent of all ad spending by 2009 -- an estimate some new
media pundits might find conservative, given the rapid shifts in digital
technologies. VSS says the forces driving change are clear: the expansion
of digital media technologies, the shift toward consumer control of
media--especially media supported primarily by consumer spending--and a
shift toward greater return on investment in marketing that is driving
advertisers to use greater shares of new media.
[SOURCE: MediaPost, AUTHOR: Joe Mandese]
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=33...

FAIR? BALANCED? A STUDY FINDS IT DOES NOT MATTER
A new study by Stefano DellaVigna of the University of California, Berkeley
and Ethan Kaplan of the Institute for International Economic Studies at
Stockholm University finds that the advent of the Fox News Channel, Rupert
Murdoch's cable television network, has had no detectable effect on which
party people voted for, or whether they voted at all. Because Fox News
started just before the presidential election in 1996 and was hardly
available at the time of that election, a major question is whether the
introduction of Fox in a community raised the likelihood that residents
voted for George W. Bush over Al Gore in the 2000 election, as compared
with the share who voted for Bob Dole over Bill Clinton in the (pre-Fox)
1996 election. Disregarding third-party candidates, Professors DellaVigna
and Kaplan found that towns that offered Fox by 2000 increased their vote
share for the Republican presidential candidate by 6 percentage points (to
54 percent, from 48 percent) from 1996 to 2000, while those that did not
offer Fox increased theirs by an even larger 7 percentage points (to 54
percent, from 47 percent). Why was Fox inconsequential to voter behavior?
One possibility is that people search for television shows with a political
orientation that matches their own. In this scenario, Fox would have been
preaching to the converted. This, however, was not the case: Fox's viewers
were about equally likely to identify themselves as Democrats as
Republicans, according to a poll by the Pew in 2000. Professors DellaVigna
and Kaplan offer two more promising explanations. First, watching Fox could
have confirmed both Democratic and Republican viewers' inclinations, an
effect known as confirmatory bias in psychology. The professors' preferred
explanation is that the public manages to "filter" biased media reports.
Fox's format, for example, might alert the audience to take the views
expressed with more than the usual grain of salt. Audiences may also filter
biases from other networks' shows. The tendency for people to regard
television news and political commentary as entertainment probably makes
filtering easier. Fox's influence might also have been diluted because
there were already many other ways to get political information.
[SOURCE: New York Times, AUTHOR: Alan B. Krueger]
http://www.nytimes.com/2005/08/18/business/media/18scene.html
(requires registration)

CAPTIONERS BUSY AS BROADCASTERS COPE WITH NEW FCC RULES
There are 28 million deaf or hard of hearing people in the U.S., according
to the National Assn. of the Deaf, which joined other advocacy groups in
petitioning the FCC to improve closed captioning rules and beef up
enforcement. In July the FCC said it would seek comment on its closed
captioning rules, especially the need for standards on the technical
capability of captioning, such as transcription accuracy. The Commission
also said it would ask about the need for more procedures to prevent or
remedy technical problems. A notice of inquiry hasn't been listed in the
Federal Register yet, so there's no indication of when comments and replies
are due. A Jan. 1, 2006 deadline is nearing for non-exempt new programming
to be captioned in the top 25 markets. As a result, caption providers have
seen their business grow. "Our business has naturally been growing by 50%
to 75%," said Jay Feinberg, dir.- mktg. services at the National Captioning
Institute. But broadcasters said closed captioning rules are burdensome and
confusing. In June alone, the FCC denied at least 12 bids for exemption
from compliance. Petitioners claimed captioning would be an undue financial
burden. Local stations typically pay $100 per hour for closed captioning,
Feinberg said. And real-time captioning has an inherent delay. Typically,
broadcasters send caption providers programs they want captioned, such as
soap operas or daytime shows. But for emergency coverage, there can be a
lag of 15 to 30 min. before captioning begins, Feinberg said.
[SOURCE: Communications Daily, AUTHOR: Tania Panczyk-Collins]
(Not available online)

READY TO LEARN GRANTS ANNOUNCED
On Wednesday, the Department of Education announced $23 million in "ready
to Learn" grants. The Corporation for Public Broadcasting and PBS will
co-manage $15.8 million, of which $11.8 million will be used to develop
children's programming. CPB was also awarded $4 million for outreach
efforts. The grants will support existing kids' educational shows like
Sesame Street and Between the Lions. CPB and PBS will also develop new
programs with an eye toward interactive elements, including web content,
teacher and parent materials, and multimedia platforms for handheld
devices. WTTW Chicago, which submitted a proposal separately from that of
CPB and PBS, received $7.4 million. WTTW will use its grant for a new
children's public television series, Word World, to premiere January 2007.
[SOURCE: Broadcasting&Cable, AUTHOR: ]
http://www.broadcastingcable.com/article/CA635866?display=Breaking+News&...
(free access for Benton's Headlines subscribers)
* See Department of Education Press Release:
http://www.ed.gov/news/pressreleases/2005/08/08172005.html

RADIO FREE AMERICA
Low-power radio stations are the most local form of community radio and are
often run by volunteers producing their own unique shows. Broadcasting at
100 watts or less, stations usually only have a radius of about 3.5 miles.
These tiny stations will never be able to compete with giants like Clear
Channel, but that's precisely the point. By positioning itself as a local
media supplement rather than a full-blown competitor, Low-Power FM, or
LPFM, has been able to gain support from grass-roots organizers and
legislators alike.
[SOURCE: American Prospect, AUTHOR: Alyson Zureick]
http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=...

VOD SOFTWARE TO INCLUDE NIELSEN CODES
Nielsen took a technological step forward Wednesday in its march to measure
video-on-demand viewership, announcing a collaboration with software
company Anystream. Nielsen "watermarking" technology will be built in to
Anystream's Agility software, allowing cable operators, content providers
and distributors to encode audio cues into VOD programming. The programming
can then be tracked by the ratings company's "active/passive" meters, which
detect the audio codes. Nielsen will measure the viewership of VOD
programming in a seven-day window after the programming airs on traditional
television. By the end of next year, Nielsen plans to measure VOD
viewership of movies, pay-per-view events and older TV shows.
[SOURCE: Broadcasting&Cable, AUTHOR: Joel Meyer]
http://www.broadcastingcable.com/article/CA635703?display=Breaking+News&...
(free access for Benton's Headlines subscribers)

TELECOM

SBC-AT&T GETS NJ OKAY, BUT VERIZON-MCI SEES STAFF OPPOSITION IN VA
On Wednesday, The New Jersey Board of Public Utilities approved the
AT&T-SBC merger provided the merged company keeps the AT&T Labs, AT&T
Network Operations Center and AT&T Enterprise Operations in the state. SBC
committed to doing so. Meanwhile, the Virginia Corporation Commission staff
advised against approving the Verizon-MCI merger because the application
"provides little, if any, Virginia-specific information or economic studies
on which the Commission can make a determination" about whether the deal
will jeopardize adequate service at reasonable rates for the public. The
staff said the companies haven't met the burden of proof that the merger
will specifically benefit Virginia citizens. The staff recommended either
denial without prejudice so the companies can refile with the additional
information, or imposition of four major conditions: 1) Subject Verizon's
intrastate long distance services to the same monitoring and reporting
requirements imposed on interexchange carriers. (2) Require Verizon to
resolve service complaints within 10 business days, when possible. (3)
Require that Verizon treat MCI as a nonaffiliated competitor for purposes
of making local interconnection agreements and for conducting the
high-capacity UNE wire center impairment analysis required by the FCC
Triennial Review Remand Order. (4) Require that Verizon track and report
the Va.-specific merger cost savings for 3 years.
[SOURCE: Communications Daily, AUTHOR: Herb Kirchhoff]
(Not available online)

SPRINT BRACES FOR AFFILIATE FIGHT
Nextel Partners, a so-called affiliate operator of Nextel, provides
wireless service to 1.8 million customers in smaller cities and towns using
Nextel's brand name and airwaves. It has a market capitalization of $7.1
billion and, under an agreement originally signed with Nextel, Nextel
Partners has an option that gives it the right to force the newly merged
Sprint Nextel to buy it out. In a filing with the Securities and Exchange
Commission yesterday Sprint Nextel began building a case for paying far
less than the current stock price for the nearly 69% of Nextel Partners
that it doesn't already own. Sprint contends that the stock price has been
inflated by takeover speculation. Nextel Partners is the only affiliate
that has the right to make Sprint Nextel buy it out. But people familiar
with the matter said some smaller affiliates, some of which are closely
held, may end up being acquired by Sprint Nextel through negotiation. One
former Sprint affiliate, U.S. Unwired Inc., already has parlayed a suit
against the nation's third-largest wireless carrier into a $1.3 billion
buyout deal. The remaining publicly traded affiliates are: Alamosa Holdings
Inc., iPCS Inc., IWO Holdings Inc., and UbiquiTel Inc.
[SOURCE: Wall Street Journal, AUTHOR: Shawn Young shawn.young( at )wsj.com]
http://online.wsj.com/article/0,,SB112429808949315728,00.html?mod=todays...
(requires subscription)

INDUSTRY CALLS FOR SLOWER E911 SKED
The FCC needs to slow what it has called an "aggressively short" timetable
for mandating emergency dialing capabilities for Internet telephones, most
communications companies argue. Further, industry and nonprofit groups that
submitted comments to the agency by this past Monday's deadline said the
FCC should be cautious about requiring location tracking technology within
computing devices, for reasons affecting both technological innovation and
privacy. The comments focused primarily on the agency's tentative proposals
to go further than its June order giving providers of voice-over-Internet
protocol 120 days to connect to traditional telephones -- in order to offer
"enhanced 911" service, or E911. Such services direct public safety
officials to the locations of people placing emergency calls via both
traditional lines, as well as Internet or cellular telephones. The deadline
is Nov. 28, 120 days from the regulation's effective date, as determined by
its publication in the Federal Register.
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
http://www.njtelecomupdate.com/lenya/telco/live/tb-XCPZ1124309336605.html
See also --
For community stations, group signals a beginning
A look at the work of the Prometheus Radio Project creating low power radio
stations.
[SOURCE: The Boston Globe, AUTHOR: Clea Simon]
http://www.boston.com/ae/tv/articles/2005/08/18/for_community_stations_g...

CONTRACTS LOCK PHONE USERS IN CELL BLOCKS
[Commentary] Would you switch your cell phone provider if you didn't have
to pay that nasty early-termination fee the companies charge customers to
get out of their contracts? Nearly half (47 percent) of cell phone users
polled said they would switch or consider switching cell phone service
carriers to get a lower rate and better service if they didn't have to pay
an average penalty of $170 to cancel their service contract, according to a
new survey by U.S. PIRG, the national lobbying office for state Public
Interest Research Groups, which are nonprofit, nonpartisan advocacy
organizations. "Early-termination penalties prevent consumers from voting
with their feet when their cell phone company treats them wrong," said Ed
Mierzwinski, the consumer program director for U.S. PIRG. "Since the cell
phone companies know the penalties make switching unaffordable for many
consumers, the carriers can get away with shoddy, overpriced service.
Eliminating these unfair penalties will let consumers out of the cells they
are locked into." In a petition to the FCC, the wireless industry says,
"The ETF thus provides a measure of predictability to the revenue stream
reasonably expected by wireless carriers, enabling carriers to offer
attractive initial discounts and monthly pricing to customers willing to
make a minimum service commitment and also ensuring carriers some measure
of compensation for lost revenue and otherwise unrecoverable upfront costs
caused by early terminations." U.S. PIRG as well as 15 members of Congress
are urging the FCC to reject the cell phone industry's petition and let
state courts determine whether these early-termination fees are reasonable.
[SOURCE: Washington Post, AUTHOR: Michelle Singletary]
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/17/AR200508...
(requires registration)

QUICKLY

E/I BUG DEADLINE SET FOR SEPT 19
The FCC Wednesday announced Monday, Sept. 19, as the deadline for
commercial and noncommercial TV broadcasters to begin displaying an
on-screen "educational/informational," or E/I, bug throughout children's
programs. The bug must air on-screen through the entirety of a show for
broadcasters to get credit toward the FCC's mandated three-hour weekly
minimum of educational children's programming.
[SOURCE: Broadcasting&Cable, AUTHOR: Joel Meyer]
http://www.broadcastingcable.com/article/CA635850?display=Breaking+News&...
(free access for Benton's Headlines subscribers)

NEW NY LAW TARGETS HIDDEN NET TOLLS
A new law that's apparently the first in the nation threatens to penalize
Internet service providers that fail to warn users that some dial-up
numbers can ring up enormous long-distance phone bills even though they
appear local. A long distance call even within the same area code can cost
8 to 12 cents a minute, adding up to hundreds, even thousands of dollars a
month. Consumers, however, must act on the warning that Internet providers
must soon post by contacting their phone companies to find out whether a
number is truly local.
[SOURCE: Associated Press, AUTHOR:Michael Gormley]
http://www.mercurynews.com/mld/mercurynews/business/technology/12408654.htm

CALIFORNIA CONSIDERS TAX BREAKS FOR FILMING
For the first time since a handful of immigrant New Yorkers moved west to
Hollywood seeking cheap land for their movie studios, so many motion
pictures are being made outside California that state leaders are poised to
enact subsidies to keep productions from leaving.
[SOURCE: New York Times, AUTHOR: David Halbfinger]
http://www.nytimes.com/2005/08/18/movies/18runa.html
(requires registration)
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service
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factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

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BROADBAND
Will Sticks Lick Broadband Fix?
Telecoms' Quest for Customers Follows Path to Internet TV
San Francisco Moves Forward on Wi-Fi Plan
The Quest For A Municipal UTOPIA
Mars Orbiter takes Broadband to Space

INTERNET
States Push Tax Plans for Web Sales
The Book on Google
The Birth of Murdoch.com

SECURITY
'Spear Phishing' Tests Educate People About Online Scams
Dueling Hackers Hit Firms' Computers

QUICKLY -- .xxx Vote Delayed; Local Info Websites may Widen UK's Rich-Poor
Gap; Fewer commercials on the horizon?; Landscape changing for broadcast
licensing; E911 Proposals Trouble Small Ops; Eligible Services List for
E-rate; Qwest Reaches Labor Pact; Clear Channel Wins New Trial; Time Warner
Unlikely To Spin Off Entire Cable Unit

BROADBAND

WILL STICKS LICK BROADBAND FIX?
[Commentary] The sticks are getting shafted when it comes to broadband. The
Pew Internet and American Life Project study reports that rural users are
only half as likely as urbanites to use high-speed Internet service, and
that two thirds of rural dial-up users either don't know of their options
to get the fast stuff or have checked it out and learned for sure they
can't get it. There are just too many areas, where cable companies never
bothered to lay wire and telcos haven't made the "final mile" investment to
extend broadband to their phone customers. High-speed Internet is quickly
becoming an essential, just like electricity and phone service. A century
ago our government pursued a policy of "universal access" to make sure that
those technologies would be available to all. In that spirit, President
George W. Bush has set a goal of high-speed Internet access available in
every home in America by 2007. But where's the beef? "It's one thing to set
a goal, and another to create policies to make it happen," says Sen. Byron
Dorgan, a Democrat from North Dakota. "Everybody understands that universal
access is broken." Sen Dorgan, along with Sen. Gordon Smith of Oregon, is
sponsoring a bill that would direct up to $500 million from the telephone
Universal Service Fund to building out broadband in unserved areas. A good
start, but compared with the highway bill President Bush signed last week
-- a breathtaking porkfest that designated $286 billion for overpasses,
museum renovations and bridges to nowhere -- it seems comically modest.
[SOURCE: Newsday, AUTHOR: Steven Levy]
http://msnbc.msn.com/id/8938152/site/newsweek/

TELECOMS' QUEST FOR CUSTOMERS FOLLOWS PATH TO INTERNET TV
With cable TV companies angling to take away phone customers, the telecom
industry is responding by spending billions of dollars to outfit their
networks with the latest in video technology. Their chief weapon is an
infant, unproven technology with a geeky name: Internet Protocol TV, or
IPTV for short. The beauty of IPTV? Phone companies can use their existing
networks, outfitted with new gear, to offer a rich assortment of advanced
video services. The range is practically unlimited, from "live" TV such as
pay-per-view to high-definition programming, video conferencing, gaming and
distance learning. The rush to embrace IPTV is global. Dozens of telephone
companies, from industry giants such as Bell Canada to state-owned carriers
such as Swisscom of Switzerland, are moving rapidly to deploy the new
technology. All share a common goal: to fortify their competitive flanks.
With cable operators moving quickly to add VoIP -- short for Voice Over
Internet Protocol -- telephone companies need a counterpunch.
[SOURCE: USAToday, AUTHOR: Leslie Cauley]
http://www.usatoday.com/printedition/money/20050817/iptvcov.art.htm
* How does this thing work?
The toughest hurdle for people using Pioneer's IPTV service has nothing to
do with technology, the Internet or even IP, short for Internet Protocol.
It's the remote control.
http://www.usatoday.com/printedition/money/20050817/pioneerside.art.htm
* SBC's $4 billion investment into IPTV 'not much money for us to burn'
http://www.usatoday.com/printedition/money/20050817/sbcside.art.htm

SAN FRANCISCO MOVES FORWARD ON Wi-Fi PLAN
The city of San Francisco wants ideas for making the entire 49-square mile
city a free - or at least cheap - Wi-Fi zone. Taking a step toward bridging
the so-called digital divide between the tech-savvy and people who can't
afford computers, the city government on Tuesday issued guidelines for a
plan to "ensure universal, affordable wireless broadband access for all San
Franciscans." The invitation, extended to nonprofit groups and businesses
that could eventually bid on the project, puts San Francisco among a
handful of major U.S. cities tackling the technological and political
challenges of offering Internet service to its residents on such a wide scale.
[SOURCE: Associated Press, AUTHOR: Lisa Leff]
http://www.mercurynews.com/mld/mercurynews/business/technology/12399473.htm
FCC Order Builds Momentum For Wireless Auction
The FCC made some tweaks to the rules governing the largest-ever auction of
cellular radio frequencies, which is set for June 2006. The order,
unanimously approved at the FCC's Aug. 5 meeting, made minor revisions in
the size of the frequency parcels to be auctioned for advanced wireless
services. For example, the FCC decided to slice the 90 megahertz of
spectrum into six chunks instead of five. The changes dictate that there
will be 1,122 licenses available in the auction, instead of 946,
potentially allowing smaller carriers entry to the market. The agency was
urged to make the move by the Rural Communications Association, a group of
cellular carriers, and T-Mobile USA, the smallest of the country's four
nationwide wireless companies.
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
http://www.njtelecomupdate.com/lenya/telco/live/tb-LIWX1124224076060.html

THE QUEST FOR A MUNICIPAL UTOPIA
An inter-local government agency comprising 14 cities, since 2002 UTOPIA
has been building a fiber-optic infrastructure to reach all 170,000 homes
and businesses in the cities that span the fast-developing region between
Salt Lake City and Provo. What sets UTOPIA apart from other municipal
broadband deployments is its size and "wholesale" business model. Once
completed, UTOPIA will be the largest deployment of fiber in the country.
UTOPIA is not offering service directly to citizens. Instead, it is selling
bandwidth on its network to private companies that offer voice, data or
video services to consumers. "It is absurd to require each and every
company to require it to lay exactly the same infrastructure, just as it
would be absurd to have seven airports," said Keith Wilson, chief executive
officer of Dynamic City, the private company building the network. Provo,
the state's third-largest city, is not part of UTOPIA because it already
had a fiber network. Salt Lake City was a member but withdrew.
[SOURCE: Technology Daily, AUTHOR: Drew Clark]
http://www.njtelecomupdate.com/lenya/telco/live/tb-JLQZ1124223622523.html

MARS ORBITER TAKES BROADBAND TO SPACE
NASA launched the Mars Reconnaissance Orbiter last Friday, in part to lay
the foundation for an Internet in outer space. Besides conducting basic
science research, NASA officials say, the orbiter will become part of a
high-speed telecommunications link between Earth and the Red Planet. After
the orbiter approaches Mars in 2006, it will join the Mars Global Surveyor
and Mars Odyssey to create a three-node network, which could become a
component of the InterPlanetary Internet. The InterPlanetary Internet is
NASA's solution to the speed-of-light delay in data transmission that has
hung up space communications, NASA scientists say.
[SOURCE: Federal Computer Week, AUTHOR: Aliya Sternstein]
http://www.fcw.com/article89922-08-15-05-Print
Also see, from April 2004
* PRESIDENT REVISES BROADBAND GOAL
Combining two popular recent proposals, President Bush urged Congress to
adopt as a national goal broadband access on Mars by 2020. "Look," the
President said, "we're already planning on sending scientists, astronauts
and Al Gore to Mars; they will need information flowing across cables and
telephone lines in a fast way. We can help. That's what broadband
technology is. It means we'll open the interplanetary highways of knowledge
-- new interplanetary highways of knowledge." The President added later in
the day that broadband access on Mars should not be taxed.
http://lists.benton.org/lists/arc/headlines/2004-04/msg00000.html

INTERNET

STATES PUSH TAX PLANS FOR WEB SALES
States will lose about $1.4 billion this year from estimated Internet
tobacco sales of $5 billion, according to the U.S. General Accounting
Office. So they are stepping up their efforts to extract taxes from smokers
who avoid tobacco taxes by buying cigarettes online. The Supreme Court
ruled in 1992 that states could require only merchants that have a store or
office in the buyer's state to collect a "use" tax, equivalent to the
state's sales tax. A 1949 federal law known as the Jenkins Act, however,
requires vendors that ship cigarettes to another state to provide state tax
authorities with the names and addresses of purchasers. Until recently,
states didn't aggressively pursue customers' names. Targeting online
cigarette sales raises the larger question of how to collect sales tax on
other online purchases when retailers aren't required by law to report
interstate sales. As online retailing grows, states are trying harder to
collect some of that revenue, though they are "hamstrung by the law," says
CCH's Mr. Logan. Moreover, with more than 7,500 state and local
jurisdictions imposing a sales tax -- ranging from 4% to 9% -- it is an
administrative nightmare to collect from businesses, he says. Online retail
sales for clothing, books, software, music and other consumer items should
reach $79 billion this year, up from $53 billion in 2003, according to
JupiterResearch. By 2008, that figure could jump to an estimated $118
billion. Missing out on tax revenue from those purchases is maddening for
state governments. A 2004 study by University of Tennessee economists found
that state and local governments in 2003 lost an estimated $15.5 billion in
uncollected taxes from Internet sales. That is expected to rise to $21.5
billion or more by 2008, according to the study.
[SOURCE: Wall Street Journal, AUTHOR: Kerry Hannon]
http://online.wsj.com/article/0,,SB112302940574703290,00.html?mod=todays...
(requires subscription)

THE BOOK ON GOOGLE
[Commentary] Google's goal is to organize all the world's information. It
has run into several hurdles along the way, however, as copyright holders
objected to their works being duplicated in the Google database without
payment or permission. According to Google, users who search for a word or
phrase will receive links to custom-made Web pages, each of which offers
three short excerpts from a book that contains the item being sought. The
pages will also offer ways to order the book or to search for it in a
library nearby. If this is in fact what Google does, it would be a boon not
just for publishers but also for readers. The project amounts to a 21st
century card catalog, helping people find relevant books online with the
kind of precision that Internet users have come to expect. To make this
service a reality, though, Google is skating dangerously close to the line
between fair use and piracy. Google should show more respect for
publishers' rights -- and publishers should not make the mistake of using
the strictures of copyright law to tie their own hands. Building a guide to
the contents of books is hardly the same as making bootlegged copies or
plagiarizing. It's a monumental and costly task, and publishers have given
no reason to believe they can do it for themselves. Unless their works are
as well integrated with the Net as other forms of information and
entertainment, they may be left waiting on the shelves for an audience that
no longer bothers to walk through the stacks.
[SOURCE: Los Angeles Times, AUTHOR: Editorial Staff]
http://www.latimes.com/news/printedition/opinion/la-ed-google17aug17,1,7...
(requires registration)

THE BIRTH OF MURDOCH.COM
News Corp is trying to make its mark on the Internet. The media giant spent
$580 million to acquire Intermix/MySpace.com and recently announced the
acquisition of Scout, a leading college sports site. Once the Intermix deal
closes, News Corp. Web sites will have an aggregate 50 million unique
visitors a month, the sixth-largest audience on the Web. "There is no
greater priority for the company today than to meaningfully and profitably
expand its Internet presence and to properly position ourselves from the
explosion in broadband usage that we're now starting to see," Rupert
Murdoch recently told investors. The world is changing and Murdoch is ready
to change with it. The younger viewers at the core of the company's
audience are drifting away from TV, spending more time online. They're
using the Web to socialize and communicate, downloading songs, listening to
Internet radio and podcasts, and playing online games. It won't be long
before they turn to the Web for longer-form video and TV, thanks to the
rise of broadband. About 35% of the U.S. population has broadband, which is
getting faster and cheaper every year. And advertising dollars are shifting
from TV and print to the Web. Worldwide, online advertising is expected to
soar 50% this year, to $13 billion, from $9.6 billion in 2004, according to
Ken Marlin, managing partner of Marlin & Associates, an investment bank and
advisor to media companies. Most TV and print categories are growing at
single-digit rates. "Murdoch has shown a remarkable ability to adjust and
adapt his company to the moment. He's a smart guy. He's got to be looking
around, saying, 'There's an opportunity to be a major player on the Web,
and it's closing,'" Marlin said. News Corp. wants to merge the content of a
big media company with its own portal. It won't be easy. Time Warner still
struggles to make its AOL deal work. But Murdoch may just succeed, just as
he succeeded in upending the TV business in the 80s and 90s.
[SOURCE: BusinessWeek, AUTHOR: Steve Rosenbush]
http://www.businessweek.com/technology/content/aug2005/tc20050816_5029_t...

SECURITY

'SPEAR PHISHING' TESTS EDUCATE PEOPLE ABOUT ONLINE SCAMS
Hackers are increasingly exploiting the weakest link in computer security
-- humans. Most computer users have become savvy enough to avoid obvious
attempts at what security experts call "phishing" -- phony email messages,
often purportedly from financial institutions, that ask for personal
information such as account or Social Security numbers. But many are still
succumbing to a new wave of more sophisticated attacks, dubbed "spear
phishing," that are targeted at specific companies and government agencies.
In such exploits, attackers create email messages that are designed to look
like they came from the recipient's company or organization, such as an
information-technology or a human-resources department. More than 35
million of these targeted email messages to steal critical data and
personal information were launched in the first half of the year, according
to a report this month from IBM. And use of these scams is soaring: The
number of such email messages sent rose more than 1,000% from January to
June. To fight computer crime, the good guys are masquerading as bad guys
pretending to be good guys. Some computer-security experts say the bogus
phishing exercises can help "inoculate" users against falling for real
phishing scams, much like vaccines use a broken version of a real disease
to provide immunization.
[SOURCE: Wall Street Journal, AUTHOR: David Bank david.bank( at )wsj.com]
http://online.wsj.com/article/0,,SB112424042313615131,00.html?mod=todays...
(requires subscription)

DUELING HACKERS HIT FIRMS' COMPUTERS
Rival computer hackers exploited a newly disclosed flaw in Microsoft's
Windows operating system to attack dozens of companies in what security
experts said was an Internet-crime turf war. Among the companies hit hard
by fast-spreading computer worms were a number of media outlets, including
Time Warner's CNN unit, New York Times Co. and ABC, a unit of Walt Disney
Co. Computers crashed at Kraft Foods yesterday afternoon and United Parcel
Service reported that a "very small" number of computers in various
locations were affected by a worm. The worms, small computer programs with
instructions for replicating themselves, clogged computer networks as they
sought out new machines to infect. Some companies reported that their
computers sought to continually restart themselves.
[SOURCE: Wall Street Journal, AUTHOR: David Bank at david.bank( at )wsj.com]
http://online.wsj.com/article/0,,SB112423554861414993,00.html?mod=todays...
(requires subscription)
* Media Outlets Hurt by Internet Worm
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/16/AR200508...

QUICKLY

VOTE ON .XXX PUSHED BACK A MONTH
A final decision on the fate of the highly controversial .xxx domain, which
was intended to be reserved for online pornography, will not happen until
September. The board of directors of the nonprofit group that oversees
domain names said on Tuesday that it would delay a vote until its next
meeting on Sept. 15. That decision follows last-minute opposition to the
creation of .xxx from the Bush administration and other national
governments. The vote was originally supposed to take place on Tuesday. The
move by the Internet Corporation for Assigned Names and Numbers (ICANN) was
expected after ICM Registry, the Florida company that plans to operate
.xxx, agreed on Monday to a month's delay, saying the additional time would
permit it to assuage concerns about the creation of a virtual red-light
district.
[SOURCE: CNET|News.com, AUTHOR: Declan McCullagh]
http://news.com.com/Vote+on+.xxx+pushed+back+a+month/2100-1028_3-5835702...

LOCAL INFO WEBSITES MAY WIDEN UK'S RICH-POOR GAP
The Joseph Rowntree Foundation is warning that websites offering
information on the social make-up of neighborhoods could increase the
divide between the richest and poorest places in Britain. "Until recently
these segmentation processes have been largely invisible to the public, but
with the emergence of [Internet-based neighborhood information systems] it
is entirely possible that people will start using them to sort themselves
out into neighborhoods where their neighbors are less diverse and more like
themselves," said Professor Roger Burrows, who led the research team from
the Universities of York and Durham.
[SOURCE: Reuters]
http://today.reuters.com/news/newsArticle.aspx?type=internetNews&storyID...

FEWER COMMERCIALS ON THE HORIZON?
Consumers are increasingly frustrated by all the commercials they have to
sit through when listening to the radio or watching TV and the ads they
have to wade through when reading a magazine or newspaper. And that's led
many people to less-cluttered media -- mostly cable television, satellite
radio and the Internet. Clear Channel has responded by saying it'll sell
less ad time in the hopes of gaining higher rates since ad time will be
scarcer. But analysts think people may be drawn to new media because of
content, not less commercials.
[SOURCE: CNN|Money, AUTHOR: Paul R. La Monica]
http://money.cnn.com/2005/08/15/news/fortune500/advertising/index.htm

LANDSCAPE CHANGING FOR BROADCAST LICENSING
In a marketplace being driven by empowered consumers, whose demands and
habits already are altering industry economics, how much leverage will
broadcasters and cable networks continue to have to command cash
retransmission fees and carriage for new program services? And what will
that do, in turn, to their established business relations with program
producers and advertisers? How much economic disruption will occur as a
result of the deterioration of allegiances that used to assure financial
security for broadcast networks and their TV station affiliates, between
broadcast and cable operations owned by the same media conglomerate,
between program networks and advertisers, and programers and consumers?
What new content production and distribution options will offset the
weakening traditional financial metrics with, perhaps, more lucrative and
reliable revenue streams? Over the next five years, we will begin to know
the answers as many of the licensing agreements with major distributors
held by News Corp.'s Fox Entertainment Group and Viacom's CBS Corp. expire
and are renegotiated according to a new set of economic and technology
considerations.
[SOURCE: Hollywood Reporter, AUTHOR: Diane Mermigas]
http://www.hollywoodreporter.com/thr/columns/mermigas_display.jsp?vnu_co...

E911 PROPOSALS TROUBLE SMALL OPS
Small cable operators are expressing concern about the scope of emergency
calling rules the Federal Communications Commission may put into place for
the personal protection of consumers using voice-over-Internet-protocol
services. In a filing Monday, the American Cable Association warned that
some FCC proposals, however well-intentioned, were inappropriate for VoIP
services provided by cable companies, especially capital-constrained small
companies.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA635588.html?display=Breaking+News
(requires subscription)

ELIGIBLE SERVICES LIST FOR E-RATE
Dora the Explorer Backpack -- check. Thomas thermos -- check. Batman pencil
holder -- check... The FCC is seeking comment on what telecommunications
services should be eligible for E-rate support. On December 23, 2003, the
Commission adopted a rule that formalizes the process for updating the
eligible services list for the schools and libraries universal service
support mechanism. Under this rule, the Universal Service Administrative
Company (Administrator) is required to submit annually a draft eligible
services list for the following funding year. The rule also requires that
the Commission issue a Public Notice seeking comment on the Administrator's
proposed eligible services list. Finally, at least sixty days prior to the
opening of the window for the following funding year, the rule requires the
Commission to issue a public notice attaching the final eligible services
list for the upcoming funding year. For a list of the purposed services and
instructions on how to share your comments with the FCC, see the URL below.
iPod -- check...
[SOURCE: Federal Communications Commission]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-158A1.doc

QWEST REACHES PACT WITH UNION, AVERTING STRIKE
The Communications Workers of America says it has reached a contract
agreement with Qwest, removing the threat of a strike by 25,000 telephone
workers in 13 states. The agreement includes a 7.5% wage increase over
three years, changes to healthcare coverage to reduce overall costs for
many employees, and an eight-hour cap on mandatory overtime. It still must
be ratified by workers across the 13-state region including Colorado,
Washington, Oregon, Idaho, South Dakota, North Dakota, New Mexico, Arizona,
Wyoming, Nebraska, Minnesota, Iowa and Utah.
[SOURCE: Associated Press]
http://www.latimes.com/business/printedition/la-fi-qwest17aug17,1,793137...
(requires registration)

CLEAR CHANNEL WINS NEW TRIAL
Clear Channel Communications, the largest producer of concerts and live
entertainment events, won reversal of a $70-million punitive damage award
in a lawsuit brought by a smaller competitor, Jam Sports & Entertainment.
Jam Sports claimed that Clear Channel intimidated the American Motorcycle
Assn. into reneging on an agreement with Jam Sports to promote Supercross
events nationwide in 2003.
[SOURCE: Bloomberg News]
http://www.latimes.com/business/printedition/la-fi-clear17aug17,1,132599...
(requires registration)

TIME WARNER UNLIKELY TO SPIN OFF ENTIRE CABLE UNIT
Despite urging by investor Carl Icahn, Time Warner is unlikely to spin-off
its cable division.
[SOURCE: Forbes.com]
http://www.forbes.com/markets/2005/08/16/time-warner-icahn-0816markets08...
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service
provided by the Benton Foundation (www.benton.org). Posted Monday through
Friday, this service provides updates on important industry developments,
policy issues, and other related news events. While the summaries are
factually accurate, their often informal tone does not always represent the
tone of the original articles. Headlines are compiled by Kevin Taglang
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------

For upcoming media policy events, see http://www.benton.org/calendar.htm

TELEVISION
FCC Seeks Input on Video Competition, Including Bells=92 Plans
TV seen following Net model
Evening News Looks Long-Term
Cable Is Up Late, Plotting TV Talk Shows' Demise
On RFD-TV, A Horse Is a Horse, Not 'Mr. Ed'

OWNERSHIP
Remove the Barriers to Minorities in Media
Cable, Consumer Groups Clash Anew
Radio Daze

BROADBAND
BPL Industry Gung Ho on Tex. Video Competition Bill
Web access may be as close as an electrical outlet
Bristling Over Municipal Broadband In Bristol, Va.

PEOPLE
Martin Emerges as =91Doer=92 Chairman; Some Criticize
Management Style
Telecom Legislation Prompts New Lobbying Registrations

QUICKLY -- Qwest, Union Resume Contract Negotiations; MTV Says PTC Is Off=
=20
Base; Cox Challenges Okla. Ruling On Rival SBC; Sprint Completes=20
Acquisition Of Nextel; FCC Proposes Forfeitures for USF Violations; What=20
You Can't Say Will Hurt You

TELEVISION

FCC SEEKS INPUT ON VIDEO COMPETITION, INCLUDING BELLS' PLANS
The FCC wants input on a variety issues for its annual video competition=20
report, including obligations Bells may incur to as they start to sell=20
their own pay-TV services. The notice of inquiry (NOI) for the 12th annual=
=20
assessment of the market for delivering video programming also requests=20
analyses of how conglomeration affects programming and seeks opinions on=20
the DTV transition. The NOI, issued Fri., stalled amid an 8th-floor tussle=
=20
over deregulating DSL, and was pulled from the Commission=92s August meetin=
g=20
agenda. The FCC also wants information on cable and DBS rates and service=
=20
quality; from 1998 through last year, monthly rates for certain cable=20
products rose 32%. The Commission wants to know the effect companies=20
including Cablevision, Comcast, DirecTV and Time Warner, which own both TV=
=20
programming and distribution businesses, =93have on other video distributor=
s=92=20
abilities to obtain programming.=94
[SOURCE: Communications Daily, AUTHOR: Jonathan Make]
(Not available online)
* FCC News Release:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260525A1.doc
* Notice of Inquiry:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-155A1.doc
* Commissioner Copps:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-155A2.doc
* Commissioner Adelstein:=20
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-155A3.doc
* FCC Launches Cable-Competition Report
http://www.multichannel.com/article/CA634715.html?display=3DBreaking+News

TV SEEN FOLLOWING NET MODEL
Amid a battle to rule the living room of the future, cable television and=
=20
phone companies are ripping a page from playbooks written by Google Inc.=20
and Yahoo Inc. to help navigate through the thousands of shows made=20
possible by next-generation TV. Rather than passively flipping through a=20
conventional electronic program guide much in the same way they would a=20
print TV Guide, viewers are more likely to actively search for programs as=
=20
they would on a Web site. These search capabilities become more important=
=20
as pay television services fill up advanced services such as=20
video-on-demand and digital video recorders (DVR) with more programming.=20
Borrowing ideas from the Internet is tinged with irony at a time when the=
=20
very archetypes for how to improve TV -- Google and Yahoo -- are both=20
planting stakes in the entertainment market. Yahoo, run by former Hollywood=
=20
veteran Terry Semel, has refashioned itself as an entertainment company.=20
Google has vowed to one day sell access to video. All told, TV's shift=20
could have broad implications in the $65 billion U.S. TV advertising=20
market. Broadcast television networks that base their advertising rates on=
=20
the programming schedule, are already bracing for the impact of DVRs. The=
=20
programming schedule business model could well disappear if viewers stopped=
=20
channel surfing for shows.
[SOURCE: Reuters, AUTHOR: Kenneth Li]
http://in.today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&...
ryID=3D2005-08-12T043842Z_01_NOOTR_RTRJONC_0_India-212424-1.xml

EVENING NEWS LOOKS LONG-TERM
While the demise of the nightly news has been predicted for many years, the=
=20
money is actually not bad for the No. 1 and No. 2 newscasts, says a network=
=20
executive, but =93it's awfully hard to be No. 3.=94 Today, that distinction=
=20
falls to CBS. Perhaps the network might make more money by dropping its=20
evening newscast and giving that precious time back to its=20
owned-and-operated stations for an extra half-hour of local news. The=20
evening newscasts still command a sizable audience, and all of them are at=
=20
least marginally profitable. Furthermore, they help support the bigger=20
moneymakers in the morning. Says Heyward, =93Evening news is not only viabl=
e,=20
but critical to the mix.=94 The evening newscasts are far from the=20
institutions they were before the age of cable TV and the Internet. In the=
=20
1960s and '70s, the newscasts, along with a handful of major newspapers,=20
had the ability to set the nation's news agenda. No more. According to=20
Nielsen Media, back in the '70s, 35% of all households tuned into Walter=20
Cronkite or John Chancellor on an average night. A decade ago, the evening=
=20
news' share was still 24%. Today, just 18% watch. But while the audience=20
has plunged, revenues have not. Despite the shrinking audience, broadcast=
=20
networks each year generally coax more money out of advertisers for the=20
viewers who do tune in. And despite the rise of the morning shows,=20
evening-news shows account for an even higher portion of broadcast news=20
revenues than in 1999. That's because prime time newsmagazines -- once a=20
thriving billion dollar business -- have largely been displaced by reality=
=20
shows. So the evening news now generates around 22% of broadcast-news=20
revenues, up from 19% in 1999.
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
http://www.broadcastingcable.com/article/CA634736?display=3DNews&referral=
=3DSUPP
(free access for Benton's Headlines subscribers)

CABLE IS UP LATE, PLOTTING TV TALK SHOWS' DEMISE
Although the networks still attract far more viewers between 11 p.m. and 1=
=20
a.m., their primacy is slowly being eroded =97 with potentially worrisome=
=20
results. Cable steadily nibbled away at broadcasters' share of the=20
lucrative prime-time audience over the last 10 years. Yet late night=20
remains one of the few times of the day when big networks keep a commanding=
=20
lead (another is 7 to 9 a.m.). If the trend continues and viewers keep=20
fleeing to cable after 11 p.m., analysts say, advertiser dollars will=20
follow. It could represent a cultural change as well. Young viewers, TV=20
veterans say, are increasingly migrating to cable because the programming=
=20
isn't subject to content restrictions from the Federal Communications=20
Commission and is often spicier -- if not necessarily raunchier -- than=20
that found on traditional networks. During its late-night block, Comedy=20
Central allows profanity it doesn't permit during other times of day. The=
=20
11 p.m. "Daily Show," for example, ran a clip of columnist Robert Novak's=
=20
recent on-air tirade on CNN =97 and didn't bother to bleep the expletive he=
=20
uttered before storming off the set. The message in all this seems clear:=
=20
As in so many other arenas, the old media paradigms are crumbling.
[SOURCE: Los Angeles Times, AUTHOR: Scott Collins]
http://www.latimes.com/news/printedition/front/la-na-latenite15aug15,1,8...
3.story?coll=3Dla-headlines-frontpage
(requires registration)

ON RFD-TV, A HORSE IS A HORSE, NOT 'MR. ED'
The Federal Communications Commission requires satellite companies to allot=
=20
4% of their bandwidth for channels which can't sell ad time and which are=
=20
supposed to air informational or educational programming. RFD-TV is one of=
=20
those channels, covering rural issues. RFD-TV still has to pay for airtime,=
=20
which it does by collecting underwriting and sponsorships, in much the same=
=20
way public broadcasters do. RFD-TV hasn't yet paid for Nielsen ratings, but=
=20
subscriptions to its bimonthly, $30-a-year program guide and magazine have=
=20
climbed to 70,000 from 20,000 at the end of 2003. Last year, the magazine=
=20
generated some $2 million in revenue, enough to cover the channel's=20
operating costs for the year. The channel harkens back to a time when=20
agricultural news and farm life were considered almost mainstream. From the=
=20
1950s to the 1970s, several popular TV shows -- "Green Acres," "The Andy=20
Griffith Show," "The Real McCoys" -- resided in rural America. Early radio=
=20
programming emphasized farm news. But as more people moved to the city and=
=20
the suburbs, that kind of programming faded. RFD-TV is planning a half-hour=
=20
rural news show. With 10 minutes of news, four minutes of weather and eight=
=20
minutes of commodity market analysis, the planned "Rural Evening News" will=
=20
tackle stories that might get short shrift at regular news outlets, such as=
=20
the effect of a cold front on crops or the ramifications of a mad-cow=20
tissue study.
[SOURCE: Wall Street Journal, AUTHOR: Timothy W. Martin=20
timothy.martin( at )wsj.com]
http://online.wsj.com/article/0,,SB112405480320612673,00.html?mod=3Dtoda...
us_marketplace
(requires subscription)

OWNERSHIP

REMOVE THE BARRIERS TO MINORITIES IN MEDIA
[Commentary] There has been notable progress for racial and ethnic=20
minorities in the United States in the media since the 1960s. Back then the=
=20
Kerner Commission was right on target when it charged that =93important=20
segments of the media failed to report . . . on the underlying problems of=
=20
race relations. They have not communicated to the majority of their=20
audience =AD which is white =AD a sense of the degradation, misery, and=20
hopelessness of life in the ghetto.=94 Many of that commission=92s=20
recommendations of expanded coverage, integration of the news staffs, and=
=20
training and recruitment of black journalists were implemented in the years=
=20
immediately after the riots. But as the FCC understood during the Carter=20
administration, the voice of minority groups in the media is limited by the=
=20
severe under-representation of minorities among broadcast licensees. Not=20
only do owners tend to hire employees who come from their same ethnic=20
group, they also tend to serve those audiences they are most familiar with.=
=20
A recent American Society of Newspaper Editors study found that minorities=
=20
made up 13.42 percent of employees at daily papers in 2004, as compared to=
=20
12.95 in 2003. And according to the latest RTNDA/Ball State University=20
Annual Survey, minorities comprised 21.2 percent of local television news=
=20
staffs in 2004, compared with 21.8 percent in 2003. But the local radio=20
minority workforce fell to 7.9 percent in 2004 from 11.8 percent in 2003.=
=20
The percentage of minorities in radio dropped in large part because of the=
=20
significant consolidation in the radio industry and the decimation of local=
=20
radio newsrooms even among black owners. Americans will never be able to=20
speak clearly and honestly with each other if one group of Americans=20
continues to control 98 percent of the federal licenses to the most=20
dominant form of local communication. Ethnic media will not be empowered to=
=20
speak to and for the communities it serves if the FCC does not take=20
seriously its obligation to remove the barriers that block minority=20
participation in the communications industry. How long do we have to wait=
=20
for the FCC to act?
[SOURCE: Center for American Progress, AUTHOR: Mark Lloyd]
http://www.americanprogress.org/site/pp.asp?c=3DbiJRJ8OVF&b=3D959321

CABLE, CONSUMER GROUPS CLASH ANEW
After a protracted, multiyear struggle on Capitol Hill, Congress passed a=
=20
law in late 1992 that required the Federal Communications Commission to cap=
=20
the size of cable companies and ensure cable carriage of channels not owned=
=20
by cable operators. As a result of court setbacks and bureaucratic=20
inaction, valid FCC rules have been in effect for just a few months during=
=20
the entire 13-year period, an era characterized by a series of=20
cable-operator mergers that the federal government refused to block. But=20
cable ownership is back on the FCC agenda. With a deregulatory mindset,=20
former FCC chairman Michael Powell declined to push for new rules. Powell=
=20
successor Kevin Martin, who took office in March, has different ideas,=20
announcing in May that the agency would attempt to put new rules on the=20
books and defend them in court. Federal law requires the FCC to set=20
=93reasonable limits=94 on the number of subscribers served by a single cab=
le=20
company. It also calls for a cap on the number of channels an operator may=
=20
fill with its own programming. Furious that the FCC has let a top-heavy=20
cable industry emerge, Consumers Union, the Consumer Federation of America=
=20
and Free Press in joint comments called for rules that would assign greater=
=20
value to urban than to rural subscribers, apparently in an effort to break=
=20
up markets and regions dominated by a single cable company -- for example,=
=20
Comcast in Philadelphia or Time Warner in Los Angeles, after its merger=20
with Adelphia Communications. =93Setting a meaningful horizontal limit on t=
he=20
national reach of cable operators based on an advertising market weighted=
=20
measure of subscribers would be a major step in the right direction,=94 sai=
d=20
the consumer groups, adding that their formula would require Comcast to=20
sell 4 million subscribers and back away from the Adelphia deal. The Media=
=20
Access Project, a public-interest law firm that helped defeat Powell=92s=20
effort to relax broadcast-ownership rules, is planning to ask the FCC to=20
cap one cable company at 25% of all U.S. pay-TV subscribers. That cap would=
=20
force Comcast, at 29% after the Adelphia merger, to sell systems. MAP=20
attorney Harold Feld said that because he believes the FCC would never=20
force Comcast to sell, MAP would not ask for retroactive enforcement.=20
=93Given the commission=92s reluctance to order divestitures, we don't thin=
k=20
divestitures are likely,=94 Feld said.
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
http://www.multichannel.com/article/CA634624.html?display=3DPolicy
(requires subscription)

RADIO DAZE
Payola or no, the industry will still be in the hands of just a few=20
players, dominated by product churned out by Sony BMG and its three major=
=20
competitors -- EMI Group, Vivendi's Universal Music Group and Warner Music=
=20
Group -- and programmed by giants like Clear Channel Communications and=20
Viacom's Infinity unit. But radio does need to change its habits, and not=
=20
because the industry may be violating vague, often puzzling laws written=20
four decades ago. Radio needs to change the way it programs itself because=
=20
its audience is tuning out. Listenership has been dropping since 2003. And=
=20
after posting double-digit growth rates for most of the 1990s, radio ad=20
sales have slowed to a barely perceptible crawl: Last year advertising=20
revenue climbed just 2%, to $21.4 billion. If it wants to, though, the=20
business could help itself, simply by doing a better job of finding out=20
what listeners want. It can start by turning to the Internet. The Web can=
=20
provide radio program directors, and the record labels who try to persuade=
=20
them to play their music, with all sorts of useful data, if they're willing=
=20
to use it.
[SOURCE: Forbes.com, AUTHOR: Peter Kafka]
http://www.forbes.com/2005/08/09/radio-programming-music-cx_pk_0809radio...
int.html

BROADBAND

BPL INDUSTRY GUNG HO ON TEXAS VIDEO COMPETITION BILL
The nascent broadband over power line (BPL) sector is cheering the Texas=20
video franchising bill passed last week, calling it a model states can use=
=20
to speed utility deployments. The bill is the first of its ilk that =93trie=
s=20
to clarify=94 state regulatory issues for utilities to enter the BPL=20
business, says Brett Kilbourne, regulatory director of the United Power=20
Line Council (UPLC). The bill effectively removes BPL from municipalities=
=92=20
ambit, specifically denying them jurisdiction over rates, operations or=20
services related to BPL system construction, maintenance or operation.=20
Contending that BPL systems benefit electric utility operations, the bill=
=20
also would bar municipalities from imposing easement or right-of-way=20
obligations on BPL beyond what utilities already pay for electric purposes.=
=20
The measure clarifies BPL providers=92 open access obligations, said=20
Kilbourne. Giving utilities discretion in entering the BPL business, the=20
bill says once they do, they aren't obliged to provide open access. On=20
affiliate transactions, the bill would let a BPL firm charge a BPL operator=
=20
to use power lines. Similarly, a BPL operator could charge the utility for=
=20
utility services like automated meter reading and outage detection. When a=
=20
BPL system is installed on a telecom pole, the telecom firm should be paid=
=20
the =93customary=94 pole attachment fee, the bill says. CommDaily also repo=
rts=20
that Texas Gov Rick Perry (R) is likely to decide this week whether or not=
=20
to sign the bill. He had said he would sign no bill before the state=20
legislature agreed on education funding legislation.
[SOURCE: Communications Daily, AUTHOR: Dinesh Kumar]
(Not available online)
* Telco Two-Step
http://www.multichannel.com/article/CA634752.html

WEB ACCESS MAY BE AS CLOSE AS AN ELECTRICAL OUTLET
Broadband over Power Lines (BPL), with investments from big-name companies=
=20
including Google and IBM, is beginning to move beyond small trial projects=
=20
to deploying systems for large communities. Highly regulated power=20
companies, which operate as local monopolies, generally take a conservative=
=20
approach to new ventures, especially those outside their core mission. What=
=20
is winning them over has been the possibility of using BPL to improve=20
efficiency. With BPL, utilities can quickly identify where outages have=20
taken place, read meters remotely, and conduct preventive maintenance, such=
=20
as replacing a transformer before it fails, by monitoring unusual "noise"=
=20
on the system. While BPL faces strong competition in urban and suburban=20
areas already served by cable and phone companies, underserved rural=20
communities could benefit. But don't include single homes miles from any=20
others. An Internet signal degrades as it travels long distances over a=20
power line. The signal needs to be boosted along the way. Running service=
=20
to a single home is too costly, but service to clusters of perhaps 50 homes=
=20
or more is feasible.
[SOURCE: The Christian Science Monitor, AUTHOR: Gregory M. Lamb]
http://www.csmonitor.com/2005/0815/p13s01-stct.html

BRISTLING OVER MUNICIPAL BROADBAND IN BRISTOL, VA
The city of Bristol, which overlaps the Tennessee and Virginia border, is=
=20
literally a town divided. The Virginian twin only recently emerged from=20
legal battles over efforts to offer telecommunications service, including=
=20
high-speed Internet, while the Tennessee city is pushing forward with plans=
=20
for a municipally owned fiber-optic network without the same legal trouble.
[SOURCE: Technology Daily, AUTHOR: Chloe Albanesius]
http://www.njtelecomupdate.com/lenya/telco/live/tb-KXJR1123878279840.html

PEOPLE

MARTIN EMERGES AS 'DOER' CHAIRMAN; SOME CRITICIZE MANAGEMENT STYLE
After 5 months on the job, FCC Chairman Kevin Martin, rumored to be=20
resigning back on April 1, is instead gaining a reputation as a politically=
=20
savvy consensus builder who gets things done quickly, a skilled negotiator=
=20
and one of the most knowledgeable chairmen ever on the issues. But he draws=
=20
criticism for being a top-down manager who doesn't delegate. Chairman=20
Martin personally ran negotiations with Democratic Commissioners Copps and=
=20
Adelstein that led to the wireline Internet access order=92s passage in=20
record time -- less than 6 weeks after the U.S. Supreme Court approved=20
similar FCC regulatory treatment for cable modem service. The order also=20
reflected Martin=92s political savvy, sources said. For example, the=20
compromises he offered the Democrats hardly were abhorrent to the=20
Republicans. He proposed measures assuring law enforcement access to DSL=20
and VoIP services and protecting rural telephone companies against revenue=
=20
declines. The order reportedly doesn't give the Bells everything they=20
wanted and will include some protection for competing LECs. In general, =93=
I=20
think he is a very accurate reflection of the White House and Republican=20
policy on the economy, technology and telecommunications,=94 said attorney=
=20
Andrew Lipman. Martin subscribes to the same =93broad themes of deregulatio=
n,=20
economic expansion, less government, fewer crutches to competitors and=20
letting everyone compete from the same starting place,=94 Lipman said. =93H=
e=92s=20
made clear that the number one issue is broadband deployment, which is the=
=20
only issue the White House has spoken on.=94
[SOURCE: Communications Daily, AUTHOR: Edie Herman]
(Not available online)

TELECOM REGISTRATION LEGISLATION PROMPTS NEW LOBBYING REGISTRATIONS
According to the latest filings with the Secretary of the Senate, it is a=
=20
good time to be a communications policy lobbyist. For example, Verizon this=
=20
year has hired 5 firms to lobby Congress on issues such as telecom and=20
broadband, spectrum allocation and regulatory parity in broadband=20
deployment. While some companies hire firms for specific issues such as=20
mergers or indecency legislation, others bring on board experts that have=
=20
key contacts on Capitol Hill on committees that oversee telecom. Shuffling=
=20
firms is commonplace, said one lobbyist, and often personal contacts lead=
=20
to a firm landing new clients. For instance, the former Bracewell Patterson=
=20
group added new clients including News Corp. when Rudolph Giuliani joined=
=20
its practice with an office in New York. Most companies that can afford it=
=20
hire multiple firms with specialized expertise.
[SOURCE: Communications Daily, AUTHOR: Tom Wonder, Anne Veigle]
(Not available online)

QUICKLY

QWEST, UNION RESUME CONTRACT NEGOTIATIONS
Qwest, the fourth-largest U.S. local telephone company, is negotiating a=20
new contract with the Communications Workers of America which represents=20
25,000 of the company's workers. The two sides avoided a strike over the=20
weekend. Qwest is asking the union for help in cutting costs. The company,=
=20
based in Denver, has $17 billion in debt. The union has said the main=20
disputes in the bargaining were Qwest's proposals for mandatory overtime,=
=20
wages, health care and retiree benefits. The CWA's executive board Saturday=
=20
authorized a strike, but its president must set a date before the union=20
would strike. The union staged a two-week strike in 1998 against the=20
company, and agreed to a wage freeze two years ago. Qwest is the dominant=
=20
local telephone company in 14 states.
[SOURCE: Wall Street Journal, AUTHOR: Reuters]
http://online.wsj.com/article/0,,SB112404669072112644,00.html?mod=3Dtoda...
us_marketplace
(requires subscription)

MTV SAYS PTC IS OFF BASE
MTV was taking issue Friday with a Parents Television Council study=20
suggesting its programming was filled with inappropriate language that=20
wasn't being identified with an L warning in its content ratings. "The=20
report is wrong," said MTV. "We do use descriptors when warranted and we=20
don't air vulgar language," said Jeannie Kedas, MTV spokeswoman.
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
http://www.broadcastingcable.com/article/CA634284?display=3DBreaking+New...
eferral=3DSUPP
(free access for Benton's Headlines subscribers)

COX CHALLENGES OK RULING ON RIVAL SBC
Cox Communications has filed a state Supreme Court challenge in Oklahoma,=
=20
alleging the state=92s utility regulators violated their own rules in a=20
proceeding late last month that gave landline pricing flexibility to SBC=20
Communications. The operator also petitioned the Oklahoma Corporation=20
Commission on Aug. 4 to reconsider its own order. The OCC voted 2-1 on July=
=20
28 on the SBC pricing flexibility request. In return for diminished=20
regulation, SBC was ordered to extend digital-subscriber line access to 68=
=20
rural communities. If completed, this will extend DSL to all of SBC=92s=20
switching facilities. Cox and the state=92s cable lobby opposed the move,=
=20
arguing there is insufficient competition to justify deregulation.
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
http://www.multichannel.com/article/CA634623.html?display=3DPolicy
(requires subscription)

SPRINT COMPLETES ACQUISITION OF NEXTEL COMMUNICATIONS
Sprint completed its $35 billion acquisition of Nextel Communications to=20
form Sprint Nextel. Announced in December, the acquisition creates a=20
cellular giant with more than 40 million subscribers.
[SOURCE: Wall Street Journal]
http://online.wsj.com/article/0,,SB112407239456113054,00.html?mod=3Dtoda...
us_marketplace
(requires subscription)

FCC PROPOSES ALMOST $1.5 MILLION IN FORFEITURES FOR UNIVERSAL SERVICE FUND=
=20
VIOLATIONS
On Friday, the Federal Communications Commission issued Notices of Apparent=
=20
Liability ("NALs") totaling almost $1.5 million against two=20
telecommunications carriers for apparently violating Universal Service Fund=
=20
("USF") and regulatory fee rules. The two corporations that are the subject=
=20
of the NALs are Telecom Management, Inc., and OCMC, Inc.
[SOURCE: Federal Communications Commission]
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260537A1.doc

WHAT YOU CAN'T SAY WILL HURT YOU
[Commentary] The United States has a long and unfortunate history of=20
overreacting to the fears and anxieties of wartime and excessively=20
restricting the freedom of speech.
[SOURCE: New York Times, AUTHOR: Geoffrey R. Stone, University of Chicago]
http://www.nytimes.com/2005/08/15/opinion/15stone.html
(requires registration)
--------------------------------------------------------------
Communications-related Headlines is a free online news summary service=20
provided by the Benton Foundation (www.benton.org). Posted Monday through=
=20
Friday, this service provides updates on important industry developments,=
=20
policy issues, and other related news events. While the summaries are=20
factually accurate, their often informal tone does not always represent the=
=20
tone of the original articles. Headlines are compiled by Kevin Taglang=20
(headlines( at )benton.org) -- we welcome your comments.
--------------------------------------------------------------